This paper provides a new framework for the derivation and estimation of consumption and equity premium functions. Applying duality in a dynamic context, we show that equity premium and consumption functions can be easily obtained from the indirect utility function. Our new framework, therefore,...

We would like to thank Gordon Tullock and an anonymous referee of this journal for their helpful comments and suggestions.

In this paper, we use duality properties to show that the saving function can be derived in a non-expected utility framework, even with fairly general preferences. We propose an econometric framework for estimation of the cross-country aggregate saving function, using a flexible functional form...

The purpose of this paper is to measure some of the economic effects of greater population diversity. Theoretically, the effects of greater diversity depend on trade-offs between dynamic and static efficiency and on the importance of informational networks. In general, the effects are ambiguous...

This paper analyzes how uncertainty influences the formation and design of regional trade agreements (TAs). Two sources of uncertainty — in demand and costs — are considered. Using a multi-stage game we show that, as long as some decisions are made after uncertainty is resolved,...

This paper provides a simple dynamic model that explores the interdependence and dynamic properties of hate, violence and economic well-being. It shows that a time-dependent economic growth process that affects the evolution of hate can yield a long run steady state, but this steady state will...

This paper provides an explanation for the emergence of political extremism in an environment in which a change in “ré gime” requires an investment that benefits more than one player. We show that in order to mitigate the effects of free riding, players may choose extreme positions....

This paper examines the interaction between root causes, domestic policy considerations and the use of extremism as a strategic tool in an external conflict. Within a two-country three-stage game, we show that, in general, domestic policies will be used strategically to achieve the desired level...

The purpose of this paper is to provide an empirically implementable framework for the analysis of the effects of uncertainty on firm behavior. In particular, the paper provides a model which can be used to calculate productivity growth for firms facing uncertainty and to decompose the growth in...

This paper examines the effects of union contracts on the firm’s capital structure. We consider one-stage and two-stage models, as well as wage and wage/employment contracts. We show that, for all Pareto efficient bargaining solutions, a higher debt reduces the expected tax bill, but increases...